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Canada bans foreign home buyers for two years

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Re: Canada bans foreign home buyers for two years

#521

Post by skeeter2020 »

huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

>> As it is often the case, politicians go for the headline with the highest electoral ROI

They also conveniently target people who can't vote, much like big taxes on out-of-province housing purchases that are very popular within Canada.

Re: Canada bans foreign home buyers for two years

#523

Post by weeksie »

ihaveajob wrote: post #514
weeksie wrote: post #511

Earlier quoted context omitted.

It'll be interesting in a couple years when prices are still crazy and someone has to come up with an excuse for why. It's amazing to me how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in. It's always a search for exotic explanations like foreign buyers and mysterious empty apartments.

What concerns me, as a non-Canadian not living in Canada, is that if a separate cause (i.e. global recession) makes housing prices drop in Canada during this period, NIMBYs everywhere will use that as evidence that "it works", and will try to replicate elsewhere.

It'll be interesting. Unless the population shrinks I think people will still feel squeezed, since things still won't feel affordable if e.g. interest rates go up and prices stagnate.

Re: Canada bans foreign home buyers for two years

#524

Post by nybble41 »

dimitrios1 wrote: post #513
huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

The root cause of the supply constraint that ultimately gives real estate it's value is the land, and more specifically, the land being in a particular location . For example, a row of condos built right next to a major employer of the town, in the center of the city. That land is going to be valuable so long as that town exists, and as the population continues to grow, will only become more valuable. Adding more hou…

> The idea that houses are appreciating assets doesn't come from some fundamental law or ideology. It comes from recognizing reality.

Houses are not appreciating assets, in general. They are durable goods but tend to degrade if not maintained. Land is often an appreciating asset for the reasons you mentioned. And of course the "NIMBYism, zoning laws, permitting" play a part in that, by restricting the land available for various desired uses. Removing these factors would help, though of course it wouldn't completely negate the tendency for land prices to rise, especially in densely populated areas.

> But, what you are really wanting to argue against is private property ownership.

Removing private property ownership wouldn't make more land available, or cause it to be used more efficiently. Quite the opposite in fact.

Re: Canada bans foreign home buyers for two years

#526

Post by skeeter2020 »

mig39 wrote: post #395
FerociousTimes wrote: post #274

Earlier quoted context omitted.

Yes, this is a political move to appeal to the electorate for window dressing and not based on merits or practical and well-thought considerations. "Hey, we banned those darned foreigners just for you, can we get some love now at the ballot box? xoxo"

If it's for political reasons, then why only two years? Voters won't be going to the ballot box for another 4 years or so.

see: "this mask requirement with last for 30 days" ..extended ad-infinitum. This is big policy 101.

Re: Canada bans foreign home buyers for two years

#527

Post by dimitrios1 »

weeksie wrote: post #519
dimitrios1 wrote: post #513

Earlier quoted context omitted.

The root cause of the supply constraint that ultimately gives real estate it's value is the land, and more specifically, the land being in a particular location . For example, a row of condos built right next to a major employer of the town, in the center of the city. That land is going to be valuable so long as that town exists, and as the population continues to grow, will only become more valuable. Adding more hou…

You can always build more dense housing on land that is in high demand. In fact, doing that is the most obvious and effective way to keep prices low for desirable locales. Backed up by pretty much all the economic research on the subject in the last decade.

Great, is that economic research based on thought experiments or reality? I'd love to read it. Let's go back to my example. You build denser housing on top of or next to the condos I mentioned, what happens? The workers move in closer to the city center. The price is low for a short period of time, until more people migrate. Just like when the highway opens up a new lane. The traffic is better for a short period, until more people begin using the highway more. Then you are back to the status quo.

You could argue that you can just keep building up and up until you cross the threshold of demand affecting the price, but without a market incentive to do that, it's wishful thinking at best. "Well the government could fund it" you could say, and indeed it can. But speaking of economic research, everytime the government has done such a thing, it causes widespread economic depression of the local area.

Re: Canada bans foreign home buyers for two years

#528

Post by dimitrios1 »

nybble41 wrote: post #524
dimitrios1 wrote: post #513

Earlier quoted context omitted.

The root cause of the supply constraint that ultimately gives real estate it's value is the land, and more specifically, the land being in a particular location . For example, a row of condos built right next to a major employer of the town, in the center of the city. That land is going to be valuable so long as that town exists, and as the population continues to grow, will only become more valuable. Adding more hou…

> The idea that houses are appreciating assets doesn't come from some fundamental law or ideology. It comes from recognizing reality. Houses are not appreciating assets, in general. They are durable goods but tend to degrade if not maintained. Land is often an appreciating asset for the reasons you mentioned. And of course the "NIMBYism, zoning laws, permitting" play a part in that, by restricting the land available…

To be clear, I wasn't suggesting that I support removing private ownership. I was merely suggesting to parent to be honest about what they are really upset at. It isn't NIMBYs or town councils with their, admittedly, sometimes backwards zoning laws. Its private parties who own land and are acting in their own best interests.

Re: Canada bans foreign home buyers for two years

#529

Post by kadomony »

Every country should have zoning like Japan.

Of course, this would absolutely dilute and depreciate houses as an investment over the long-term, but people would just funnel money into stocks instead. Why would corporations be against this?

US zoning is a complete shitshow that’s ruining our country and fostering inconvenient suburban sprawl.

Re: Canada bans foreign home buyers for two years

#530

Post by johnnyanmac »

weeksie wrote: post #511
huevosabio wrote: post #493

These are boogieman policies that have zero influence on the root cause. Foreign investors jump into the housing market because the current system ensures that the supply of housing is limited so it is an attractive way to park your wealth. But that is not the root cause. The root cause is the system that is geared to keep houses always appreciating via supply constraints: aggressive zoning, discretionary permitting,…

It'll be interesting in a couple years when prices are still crazy and someone has to come up with an excuse for why. It's amazing to me how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in. It's always a search for exotic explanations like foreign buyers and mysterious empty apartments.

>how resistant people are to the idea that housing is expensive because there aren't enough homes for people to live in.

I imagine there are enough homes in both America and Canada (they are two of the largest countries after all). But it's all about location. Very few can even afford to move out to the middle of nowhere just to own land. And not many people that can are willing to turn their potentially short commute to work into a 90+ minute trek everyday.

Even with an increase in work from home, there's the whole entertainment aspect of living in the city that makes it a hard sell. When I mean middle of nowhere, I mean a small "town" whose businesses amount to a liquor store, some off brand shopping market, a burger joint, and a 20 year outdated public library. Anything else you need is in the suburbs 30 miles out, and Downtown will be another 30-40 after that.

You will quickly bore of any ventures in town and seek a drive to the city where there's actual events going on. If you're a recluse you can make it work, but I can understand millenial aged people not jiving with that style

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